America vs. Russia and China: Welcome to Cold War II

The Second Cold War is a rematch among the same teams.

America vs. Russia and China: Welcome to Cold War II

FOR THE first time since the Cold War ended, air-raid sirens sounded in Hawaii on November 28, 2017. The exercise was part of the revival of the state’s emergency warning system in response to the possible threat of North Korean nuclear missile attack. But the wail of the siren could also symbolize the coming of Cold War II.

Historians have never agreed about when the first Cold War began: in 1946, when the United States and Britain clashed with the Soviet Union over the Greek Civil War? During the later stages of World War II? With the communist coup d’état in Russia in October 1917? Agreement is also lacking about when, exactly, the Cold War ended: with Gorbachev’s 1986 address to the United Nations renouncing Soviet revisionist foreign policy? With the fall of the Berlin Wall in 1989? With the formal dissolution of the USSR in 1990, when Boris Yeltsin replaced Mikhail Gorbachev and became head of the newly minted Russian Federation?

The historians of the future may engage in a similar debate about when Cold War II started in earnest. Was it in 2014, with the unilateral Russian annexation of Crimea and the backlash this produced from the United States and its European allies? Or did Cold War II begin with the brief Russo-Georgian War of 2008? Others may seek the date in China’s move to secure its claims over the South China Sea by modifying and militarizing a number of disputed islands and reefs.

One thing is clear: within the last few years, what Yeltsin in 1994 called “the cold peace” between Russia and the American-led Western alliance has become both colder and less peaceful. Relations between the United States and China have become increasingly conflictual, in the military, diplomatic and economic realms alike. The cold peace of the 1990s and 2000s is over. Cold War II is here.

THE SECOND Cold War is a rematch among the same teams that opposed each other for most of the First Cold War. On the one side are the United States and its East Asian and European allies, including new NATO allies in central and eastern Europe and the Baltic. On the other side are Russia and China and their allies and clients.

In Cold War II, as in Cold War I, the rivals have organized competing military alliances. Following the Cold War, the United States maintained the NATO alliance and expanded it to Russia’s borders, over its intense objections. Similarly, in East Asia the United States maintained its Cold War alliances with Japan, South Korea and Taiwan, continuing an unstated policy of containing China as well as post-Soviet Russia. In response to the rise of Chinese military power and assertiveness, the United States has also taken part in the Quadrilateral Security Dialogue (Quad) along with Japan, India and Australia. The Quad is widely viewed as a de facto anti-Chinese alliance, part of what the Obama administration called the U.S. “pivot to Asia” in response to growing Chinese power.

All the non-Soviet states that were once members of the Warsaw Pact are now members of the U.S.-led NATO alliance. Russia has deterred NATO’s offers of membership for Georgia and Ukraine by means of its 2008 incursion into Georgia on behalf of the breakaway Ossetian republic, and its annexation of Crimea and support for Russian-speaking separatists in Ukraine. Meanwhile, Russia has tried to consolidate a sphere of influence in much of the former territory of the USSR, partly in the form of the Eurasian Economic Union, which includes Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia.

At the same time, Russia has allied itself loosely with China. The two great Eurasian powers, with other countries, have formed their own Eurasian alliance, the Shanghai Cooperation Organization (SCO). Founded in 2001, the SCO includes Iran and India and excludes U.S. military allies, with the exceptions of Pakistan and Turkey. In 2005 the SCO rejected a U.S. application for observer status. Thanks to the participation of China and India, the SCO includes the world’s two most populous states as well as Russia, the country with the largest territory.

While the ostensible purpose of the SCO is to combat terrorism, Sino-Russian military cooperation is the center of the organization’s periodic military drills (the next will be held in Russia in September 2018). The core members of the SCO include the three nations treated by U.S. military planners as America’s major adversaries: China, Russia and Iran.

China and Russia are also strengthening their relations with allies to boost their ability to project power far from their homelands. Having forestalled the possible loss of its Crimean port of Sevastopol by annexing Crimea, Russia entered the Syrian Civil War in part to secure its military bases in Syria.

Over the objections of the United States and many of its neighbors, China has announced sweeping claims to sovereignty over the South China Sea and sought to ratify them by constructing and fortifying artificial islands. The so-called “string of pearls” refers to a network of Chinese naval bases and civilian ports and shipping centers from the South China Sea to Bangladesh and the port of Gwadar in Pakistan, which some interpret as strategic encirclement of India. China has built a military outpost in Djibouti in the Horn of Africa, not far from the U.S. base in the same country at Camp Lemonnier. China’s extensive civilian investment and commercial activity in Africa and Latin America also extend its global reach, insofar as Chinese firms are subordinate to China’s authoritarian state.

Arms races are more evidence that the world has moved from cold peace to cold war. While Russia under Putin is expanding its nuclear arsenal, China has seemed content with a minimal arsenal for deterrence.

The United States has announced it will take new military and economic measures to retaliate against Russia’s deployment of a new missile that, according to Washington, violates the Intermediate-Range Nuclear Forces Treaty (INF), which eliminated both cruise and ballistic missiles from Europe. Meanwhile, some in Washington believe the INF treaty unnecessarily ties the hands of the American military. Republican hawks saw to it that Congress appropriated $58 million in the 2018 defense budget for the development of land-based cruise missiles. In December 2016, President-elect Trump tweeted, “Let it be an arms race,” following on an earlier tweet in which he declared that the United States “must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes.” In turn, during an annual address this March, Putin displayed an animated video of hypersonic, nuclear-capable missiles raining down on what appeared to be the state of Florida.

Cold War II is also underway in the realms of espionage and sabotage. According to a February 2017 report by the U.S. Defense Science Board, the United States is threatened by cyberattacks from Russia and China, as well as Iran and North Korea. The United States claims that hackers associated with the Chinese government have stolen intellectual property to help Chinese firms. H. R. McMaster, then Trump’s national security adviser, announced in February in Munich that it is now “incontrovertible” that Moscow interfered in the 2016 American presidential election. In addition, according to the United States, foreign nations have planted malware in computer networks that can affect the U.S. electric grid. One form of malware, “BlackEnergy,” it is claimed, originated with Russia’s government and was used to attack the electric grid in Ukraine.

For its part, the United States has its own growing cyberwar capability. According to the New York Times, the United States has successfully hacked North Korean missiles, causing high rates of failure. Stuxnet, a malicious computer worm, is alleged to have been created by a joint U.S.-Israeli project to cripple Iran’s nuclear centrifuge program.

Like Cold War I, Cold War II involves a space race—or rather, space races. While both the United States and China talk about ambitious projects like sending astronauts back to the moon or Mars, the space race in Cold War II is being driven by military considerations. In 2007, China demonstrated its antisatellite capability by destroying one of its own satellites, in a test of a kind stopped by the United States and the Soviet Union in the 1980s because of the damage done by debris clouds. In summer 2017, China tested an ultrasecure spy satellite relying on the phenomenon of “quantum entanglement” between the satellite and ground stations, leapfrogging the United States in this branch of technology. In order to avoid reliance on the U.S.-created Global Positioning System, China has created its own rival global satellite navigation system, BeiDou. Meanwhile, in 2013, Congress passed a law prohibiting NASA funds from being used to collaborate with China in any way.

Since the retirement of the Space Shuttle program, the United States has ceded leadership in manned spaceflight to Russia, which has continued to send cosmonauts to the International Space Station. Lacking any current manned spaceflight capability, the United States has been reduced to having its astronauts hitch rides to the International Space Station on Russian rockets. Even more embarrassing, the Pentagon will rely on Russian-made rocket engines to launch military satellites for years to come, while funding the development of American-built alternatives by the United Launch Alliance, a Boeing–Lockheed Martin joint venture, and entrepreneur Elon Musk’s SpaceX.

IN COLD War II, rival trade blocs complement rival military alliances. Contrary to a widespread misconception, the United States began taking a harder line toward China before the election of Donald Trump, during the Obama administration. For example, Obama backed twenty-three trade-enforcement challenges at the World Trade Organization (WTO)—fourteen of them targeted at China.

The Obama administration portrayed its trade policy in explicitly anti-Chinese terms. This was the headline in Newsweek on October 12, 2015: “If the U.S. and Europe Don’t Agree on Trade Pact, China Wins.” According to the author, Judy Dempsey:

“Both the TTIP and TPP are about the United States building alliances—across the Atlantic and across the Pacific to deal with China. . . . In short, both pacts are seen as competition between the United States and China for setting the trading rules of the 21st century.”

In a February 15, 2016 message to the White House email list, President Obama candidly treated the TPP as an anti-Chinese measure in a zero-sum rivalry for influence over global trade rules:

“That’s why we have to make sure the United States—and not countries like China—is the one writing this century’s rules for the world’s economy. . . . Right now, China wants to write the rules for commerce in Asia. If it succeeds, our competitors would be free to ignore basic environmental and labor standards, giving them an unfair advantage over American workers. We can’t let that happen. We should write the rules.”

In its attempt to defend the TPP from populist and progressive criticism, the Obama administration mobilized national-security officials and foreign-policy figures to argue that the agreement was an essential part of a comprehensive anti-Chinese alliance system led by the United States. In January 2017, for example, Republican senator John McCain denounced Trump’s decision to withdraw the United States from the TPP on geopolitical grounds: “My concern is that we consign the Asia-Pacific region to China.”

The Trump administration has scuttled the TPP, while the TTIP is dormant because of domestic opposition in Europe and the United States. In “The President’s 2017 Trade Policy Agenda,” the Trump administration repudiated the preference for multilateralism of its predecessors since the end of the Cold War for an “America First” approach to trade:

“For more than 20 years, the United States government has been committed to trade policies that emphasized multilateral and other agreements designed to promote incremental change in foreign trade practices, as well as deference to international dispute settlement mechanisms. . . . [As a result] we find that in too many instances, Americans have been put at an unfair disadvantage in global markets. Under these circumstances, it is time for a new trade policy that defends American sovereignty, enforces U.S. trade laws, uses American leverage to open markets abroad, and negotiates new trade agreements that are fairer and more effective.”

Critics of the Trump administration frequently portray his economic nationalism as a catastrophic reversion to mercantilism, which could produce an uncontrollable spiral into trade conflict and world war. This is overblown. It neglects the fact that the preference of Trump and his advisors for bilateral agreements shares the same objective as Obama’s more multilateral approach: stopping further losses of the United States’ domestic and global market share to state-backed Chinese firms.

As part of its economic strategy toward China, the Trump administration is resisting the classification of China as a “market economy” instead of a “non-market economy,” a helpful status which China claims as its right under the terms of its accession to the WTO in 2001. Alarmed by China’s “Made in China 2025” blueprint for acquiring foreign technologies for the benefit of Chinese, both Republicans and Democrats in Congress are considering expanding the supervision of Chinese investments by the Committee on Foreign Investments in the United States, which reviews the national-security implications of mergers and acquisitions involving foreign actors.

Economic sanctions are another instrument of great-power rivalry in the era of Cold War II. In the case of Russia, U.S. sanctions policy focuses on pressuring Russian and foreign individuals and firms to punish the Russian government for its policies in Crimea and Ukraine. The Office of Foreign Assets Control of the U.S. Department of the Treasury supervises sanctions that target the Russian financial, energy and defense sectors, among others. Trump’s desire for better relations with Russia and Russo-American collaboration against ISIS and other shared threats has been thwarted by the stiffer anti-Russian sanctions that Congress enacted in the summer of 2017.

IN COLD War II, Marxism-Leninism’s nature as a militant faith added an ideological dimension to the geopolitical struggle that had been missing from the world wars, which had been characterized by strange-bedfellow alliances like the alliance of Soviet communists with the American and British capitalists, and of white supremacist German National Socialists with Japanese imperialists. During the first Cold War, Western democracies were divided among anticommunists, procommunists and anti-anticommunists.

Some claim that Cold War II involves global ideological struggle pitting liberal democracy against a new authoritarianism, symbolized by Vladimir Putin and Xi Jinping—and Donald Trump. In one version of this argument, there is also a rivalry in the economic sphere between liberal capitalism, which is alleged to support a “rules-based liberal global order,” and nefarious state capitalism or economic nationalism of various kinds. A new “Beijing consensus” of authoritarian state capitalism is supposed to menace political and economic liberty simultaneously.

This is unpersuasive. American allies include Egypt, a military dictatorship, and Saudi Arabia, a despotic monarchy. Putin’s strongman politics has more in common with that of Erdoğan in Turkey, a NATO ally, than with the rule of Communist Party “princelings” like Xi in China. Ironically, in their privileged backgrounds and technocratic approach to policy, the closest American parallels to the nepotistic princelings of the Chinese establishment are dynasties like the Clintons and the Bushes, not the populist outsider Donald Trump.

TODAY’S COLD War II needs to be seen in a broad historical perspective. Its predecessor, Cold War I, was the third world war of the twentieth century. It was fought indirectly by means of arms races, proxy wars, economic warfare and ideological war, because the high cost of conventional and nuclear warfare prevented direct conflict among the adversaries.

The three world wars of the twentieth century, between 1914 and 1989, originated in bids by regimes in Germany and Russia to dominate Europe. European hegemony was necessary for Berlin and Moscow to convert their countries from mere regional powers into superpowers on a scale that could compete with the United States, which, by the early twentieth century, even when its military potential was still latent, enjoyed an unprecedented combination of industry, wealth and population.

The goal of imperial Germany in World War I was a German-ruled European sphere of influence. Hitler’s more radical alternative was a gigantic, “racially pure” German nation-state, a kind of parody of the USA, with “Aryan” pioneers settled on a new agrarian heartland in eastern Europe and Russia from which Slavs, Jews and gypsies had been removed by genocide, famine or ethnic cleansing.

Following 1945, the Soviet bid to become a second superpower depended on its suzerainty over the eastern part of Europe, which the Red Army had won by conquest from Germany in World War II. Without the skilled population and industry of eastern Europe (including East Germany), Russia alone, even with the peripheral nationalities that the USSR had inherited from the czarist empire, could be only a regional power at best. The economic base of the Soviet Union could be augmented even further, if the wealthy but weak nations of western Europe, particularly West Germany, could be intimidated into neutrality, which in turn could permit western European trade and investment on Soviet terms to bolster the USSR.

While ambitious elites in Berlin and Moscow were the instigators of the first three world wars, Cold War II has been caused by the bid of the United States—the sole global power at the time—for unlimited global hegemony in the 1990s and 2000s, and China and Russia’s hostile reaction to the American power grab.

“Offensive realism,” the variant of realist international-relations theory promoted by John Mearsheimer, holds that in an anarchic world with no sovereign to provide law and order, states will tend to amass as much relative power as they can. A great power can never be too powerful and secure. “The best defense is a good offense,” the old saying goes. Or, if one prefers, there is Mae West’s observation: “Too much of a good thing is wonderful.”

The Nazi bid for superpower status was naked aggression, inseparable from demented racist conspiracy theories. But in the previous generation, German liberals like Friedrich Naumann and Max Weber supported the project of German hegemony in a central European bloc that could hold its own in the twentieth century against the Americans and the British and Russian Empires. If the alternative was the subordination of Germany and Europe to the Anglo-Saxons or Russians, German conquest of Europe could be rationalized as a form of self-defense.

We now know that Stalin did not have aggressive designs on western Europe after World War II. On the basis of Marxist-Leninist theory, he believed that the eventual recovery of Germany and Japan would spark another round of intra-capitalist wars similar to the first two world wars. The Soviet Union had to hold onto what it controlled, expand the communist bloc opportunistically and prepare to survive World War III, which would probably begin as a conflict among America, Britain, France, Germany and Japan. From this erroneous perspective, opportunistic expansion of Soviet influence was precautionary.

In the 1990s, the Clinton administration undoubtedly regarded the expansion of NATO up to the borders of shrunken, post-Soviet Russia as a prudent way of hedging America’s bets against possible future Russian revanchism. Likewise, there is no reason to doubt that officials in the Bush and Obama administrations sincerely believed that removing Saddam, Qaddafi and Assad and installing pro-American rulers in Iraq, Libya and Syria would improve American security. The same may be said of the determination of presidents of both parties that the United States, not China, would remain the undisputed military hegemon of East Asia.

What one state views as precaution, its rivals can view as aggression. In this lies what Mearsheimer calls “the tragedy of great power politics.” And it is in this tragic context that the American bid for global hegemony that followed the fall of the Berlin Wall must be viewed. Needless to say, from the perspective of Moscow and Beijing, what Washington rationalizes in terms of self-defense and world peace resembles an effort by the United States to encircle and contain Russia and China. They could dismiss Washington’s support of nonviolent “color revolutions” in support of “liberal” and “democratic” reformers in targeted countries in Asia and Europe, like Ukraine, as the cynical weaponization of democracy promotion, particularly in light of the absence of U.S.-sponsored democratic revolutions in Saudi Arabia and other pro-American autocracies.

Historians of the future may conclude that the theme connecting seemingly unrelated American policies—including the expansion of NATO, American wars of regime change in the Middle East, support for “color revolutions” and the rush to “lock in” liberal rules of global trade by mechanisms, like the WTO and multilateral treaties, that deprived nations of economic sovereignty—was a sense that the United States enjoyed only a brief window of opportunity to shape a world order to American values and interests, in the interim before the long-term rise of China and the diffusion of wealth and power from the West inevitably diminished American influence. Those who compare contemporary China to the imperial Germany of the 1900s may get the comparison backward. Contemporary China is like czarist Russia before World War I: huge, patient and gradually modernizing under authoritarian auspices. It is the United States that has in fact been acting like imperial Germany. The German elites feared that they had only a short time to achieve European hegemony before the growth of Russian wealth and power made their plans impossible. The historians of tomorrow may conclude that a similar anxiety about rising Chinese power has motivated several American administrations to launch hasty and reckless efforts to consolidate a global Pax Americana. But the would-be architects of enduring American global hegemony in the past three decades have failed, and time is running out.

MY FIRST argument, then, is that the underlying cause of Cold War II is the American bid for global hegemony that followed Cold War I and Chinese and Russian resistance to it. My second argument is that, if American victory is defined as achieving American global hegemony in the face of their resistance, particularly the resistance of China, the United States is going to be defeated in Cold War II.

To judge by the rhetoric of the new cold warriors, the goals of the United States include, among others, the following: China’s acceptance of permanent U.S. military domination of East Asia; China’s acceptance of rules for world trade drafted by the United States and its European and Asian allies, without Chinese participation; Russia’s acquiescence in a permanent U.S./NATO presence on its borders; and Russia’s return of Crimea to Ukraine.

It is not necessary to argue that these geopolitical objectives are undesirable from an American perspective, for the simple reason that these objectives, whether good or bad, are impossible for the United States to achieve. To commit a nation to projects that cannot be accomplished must result in humiliating national failure.

Let us examine each one of these objectives of mainstream American foreign policy in detail.

China’s acceptance of permanent U.S. military hegemony in East Asia. During the two decades of the Cold Peace in the 1990s and 2000s, American foreign-policy experts could sometimes be heard saying that, although the Chinese might grumble now and then, they would ultimately acquiesce in a Pax Americana in East Asia because it served their commercial interests or prevented the remilitarization of Japan.

In a Brookings roundtable on China in November, Robert Kagan summed up the China strategy of American liberal hegemonists, dropping the mask of idealism for crude Machtpolitik:

“My attitude toward China is, do well economically, but you cannot use your military to expand your power position in the region. Is that fair? No. Is there any justice to that? No. We get the Monroe Doctrine and you don’t. That’s just the way it is, I’m sorry. . . . We are containing China and the Chinese believe we are containing them.”

In 1997, it was at least possible to believe that China, like Japan and Germany, might accept the status of a protectorate of the United States and specialize as an export-oriented, civilian power. Today that belief is delusional.

U.S. military hegemony in East Asia is not possible. Given the continuing growth in Chinese power and wealth, the only realistic alternatives are a bipolar Sino-American military rivalry in the region, a concert of power including both China and the United States and perhaps other regional powers, or Chinese regional hegemony following the decline of U.S. influence in the area.

From the perspective of the United States and its allies, protracted low-level competition with China may be preferable to American acquiescence in a Chinese sphere of influence and the appeasement of China by all of its neighbors, including Japan, if the third option of a regional concert of power is not achievable. But accepting a bipolar, divided East Asia, including buffer zones in which the United States will refrain from challenging China too provocatively, would in itself mark a retreat by the United States from the optimistic post–Cold War order in which China would accept a subordinate place as a civilian trading power in an Asia and a world run by Washington.

China’s acceptance of rules for world trade drafted by the United States and its allies without Chinese participation. Another casualty of Cold War II is the idea of a global “rules-based trading system”—at least if the rules are drafted by the United States and its allies, in a process like the TPP negotiations from which China is excluded. The Obama administration’s claim that China could be forced to play by more liberal rules in order to participate in the multinational markets that the TPP and the TTIP would create was always absurd. For one thing, the TPP’s allegedly immense trading bloc would have consisted chiefly of the United States and Japan, already deeply linked with the Chinese economy, and a collection of smaller economies that already trade heavily with China as well. As for the transatlantic TTIP, America and Europe’s hunger for access to Chinese labor, consumers or, in some cases, capital makes a mockery of claims that China would be forced to adopt liberal capitalism in order to break into a new, deeper Euro-American market.

The notion that the United States, Europe and Japan, in the early twenty-first century and without Chinese participation, could “lock in” trade and investment rules that China would be forced to obey for decades or generations to come is a fantasy. Measured by purchasing power parity (PPP), China is already the world’s largest economy; at some point in the next decade or so, it is likely to surpass the United States by the other measure, market exchange rates. While its growth rate will slow as it transitions from a developing country to a middle-income nation, China will continue to grow more rapidly than the United States or its allies among developed nations in Europe and Asia.

By 2050, the consulting firm PwC estimates, in PPP terms the GDP of China will be $58.5 trillion—as compared to the United States’ $34.1 trillion and Japan’s mere $6.8 trillion. To be sure, per capita GDP in the United States and Japan probably will still be much higher, and so will the shares of their populations comprising middle-class consumers and workers. But only the most provocative and frightening behavior on the part of China can overcome the steady growth of its economic gravitational pull.

In 2015, when the China-dominated Asian Infrastructure Investment Bank was founded as a rival to the World Bank and Asian Development Bank, both deferential to the United States, the Obama administration pressured America’s allies not to take part. The “special relationship” notwithstanding, Britain led a stampede of European countries into partnership with the AIIB. As Singapore’s Kishore Mahbubani wrote at the time, in an essay entitled “Why Britain Joining China-Led Bank is a Sign of American Decline,”

“The U.S. can no longer dominate world history. A new power has also arrived. The British, like most other middle powers, have decided to hedge their bets and work with China as well as the U.S. But this is also a matter of survival. If London does not serve the financial and economic interests of a rising China, it could become sidelined in the 21st century. Hence, the British have no choice but to work with China.”

What is true for perfidious Albion is also true for most of America’s military allies. America’s European allies in particular cannot be expected to sacrifice their interests in commercial relationships with China, whose growing military power does not immediately threaten them as the presence of the Red Army in half of Europe did during Cold War I. China’s “New Silk Road” initiative seeks to integrate countries as far away as those of western Europe into a new pan-Eurasian economic system. The idea of a Euro-American economic alliance against China is doomed in advance, thanks to the economic self-interest of European nations, looking outside their shrinking or slowly growing economies for foreign markets and offshore labor.

Russia’s acquiescence in a permanent U.S./NATO military presence on its borders and the return of Crimea to Ukraine. On the other side of Eurasia, the United States may also be forced into humiliating retreat from objectives in Cold War II that it cannot realistically achieve.

As part of its bid for global hegemony following the fall of the Berlin Wall, the United States claimed that the very idea of spheres of influence was obsolete. In 2013 Obama’s secretary of state, John Kerry, announced, “The era of the Monroe Doctrine is over.”

Really? Is turnabout fair play? If the extension of the U.S.-led NATO alliance to the borders of Russia is legitimate, would new Russian bases in Cuba be acceptable as well? Would the United States really have no objection to a Sino-Mexican military alliance, complete with Chinese military installations on the U.S.-Mexican border and provocative freedom-of-navigation operations by Chinese warships in the Gulf of Mexico? All of America’s neighbors, including Mexico and Canada, have been invaded in the past by the United States, so China could claim that its North American alliances were purely defensive in nature.

In the future, as in the past, Americans may find spheres of influence to be useful tools of statecraft. Advocates of U.S. global hegemony often equate demilitarized regions between great powers with stepping-stones to imperial conquest. But demilitarized zones and neutral nations like Belgium and Switzerland have always been important in international diplomacy, as one of a number of techniques to avert conflict. In the nineteenth century the United States and Britain, then military rivals, shared the Oregon Territory for several decades, demilitarized the Great Lakes and cooperated with respect to a possible Central American canal.

During World War II, Winston Churchill suggested to Stalin that after the war the USSR should get 90 percent influence in Romania and 75 percent in Bulgaria, while the UK would share influence over Yugoslavia and Hungary with Moscow fifty-fifty and have a 90 percent share of influence over Greece. What caused the Cold War was not the Soviets’ insistence on a lack of offensive forces near their post-1945 borders, but their installation of communist puppet regimes throughout eastern Europe, combined with their high level of militarism and anti-Western foreign policy.

The United States helped keep the first Cold War cold by respecting the Soviet sphere of influence in eastern Europe, refusing to intervene when the Red Army crushed rebellions in Germany, Hungary and Czechoslovakia. During the Cuban Missile Crisis, the Kennedy administration insisted that the Soviets remove nuclear missiles from Cuba—and resolved the standoff by agreeing to remove NATO missiles from Turkey near the Soviet border.

Without admitting that they have done so, the United States and its European allies in practice have already recognized a Russian sphere of influence in Georgia and Ukraine, by shelving plans to incorporate both in NATO and the EU following Russia’s hostile reaction. Russia is no more likely to give Crimea back to Ukraine than the United States is to return Texas and California to Mexico. Any stable settlement of the proxy war in Ukraine will be based on negotiated partial autonomy for pro-Russian regions and the neutralization of Ukraine as a whole. Here, as in East Asia, the only options are negotiated neutrality, power sharing or continuing conflict. Neither Russia nor China, under any conceivable political regime, is likely to accept the legitimacy of U.S. military installations and operations near its borders.

BEFORE FAILURE forces it to do so, the United States should abandon the doomed bid for global hegemony that followed Cold War I and has provoked Cold War II. The alternative should be a geopolitical version of what the philosopher John Gray, in the context of societies divided by incommensurable values, calls a “modus vivendi.”

A global modus vivendi might have a number of features familiar from great-power concerts and diplomatic settlements in the past. There would be attempts at arms control—but not total disarmament, because each great power would retain the right to maintain basic armed forces essential for its defense.

In the new global modus vivendi, spheres of influence and demilitarized zones would be legitimate objects of diplomatic negotiation, in order to reduce tensions among great powers. Small and weak nations might chafe at the constraints on their independence such agreements impose, but their discomfort is unavoidable in a world that, regardless of models of domestic government, will always be organized largely on the basis of hierarchies of military and industrial power.

In economic policy there is also a case for a pragmatic modus vivendi in the place of unachievable grand designs. A global economy governed by a single set of rules, liberal or otherwise, is not possible, and would be undesirable if it were. There has never been a single economic model adopted by all countries, at all levels of development and in all circumstances. During the Cold War, anti-statist America, social democratic Sweden, dirigiste France, economic nationalist Japan, protectionist Latin American countries practicing import substitution and feudal petromonarchies in the Middle East managed to be geopolitical allies. In the generation since Cold War I ended, the so-called Washington Consensus in favor of liberal capitalism was always ignored by successful nations in East Asia. The Washington Consensus will not be replaced by a Beijing Consensus, but by economic pluralism. If countries including the United States find that their national economic interests are better served by bilateralism and “minilateralism,” then there is no reason to lament the abandonment of the project of a single set of rules and regulations for the global economy, a utopian goal that never had any appeal beyond narrow circles of technocrats, lobbyists and academics.

As for values, there is no need for Americans to become moral or cultural relativists. But while individuals and private groups can proselytize for what they hold to be universal values—whether in the form of postmodern secular liberalism or evangelical Protestantism—it is not in the national interest for the U.S. government to treat all states that do not share them as illegitimate regimes.

In short, where genuine American interests and useful alliances are at stake, the United States should defend them vigorously against China, Russia or any other country. But it is folly to continue to equate America’s national interest with the creation and defense of a global Pax Americana, which America’s rivals reject, and which America’s allies are unlikely to exert themselves to defend. Only by balancing its resources and commitments can the United States help to lead the world back from the new cold war to a new cold peace.